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Lower grain prices, higher hog prices an issue in the US

A combination of declining grain prices and hog prices that have stayed relatively firm is slowing the slaughter of sows in the US.  The same report echoes Statistics Canada's latest figures but adds the breeding inventory north of the border was also down five percent from 2007.

August 20, 2008  By

August 20, 2008

As grain prices have continued to fall and hog prices have remained relatively firm, sow slaughter may be slowing in the United States.

"Our contacts indicated that sows are simply not available since corn and soybean prices fell dramatically during July and hog prices have rallied to annual highs in recent weeks," wrote livestock analysts Steve Meyer and Len Steiner in the CME Group's Daily Livestock Report. "The liquidation signals are not nearly as strong as they were just a few weeks ago."


The analysts noted that while U.S. sow slaughter has been 9.3 percent higher so far this year, sow prices have exploded in the past three weeks to reach their highest level of the year and surpass both last year's price and the five-year average.

Canada continues to liquidate hogs
Meanwhile, Statistics Canada reported Tuesday that farm inventories of all hogs declined 11.6 percent between July 2007 and July 2008 to 13 million hogs, which is the lowest level since 2000, as soft slaughter prices and high feed costs continued.

The Canadian breeding inventory, at 1.49 million head, was down 5 percent from last year and down 1 percent from last quarter. Sows farrowed during this period totaled 801,700 head, down 1 percent from last year.

The CME Group report noted that Canada's sow buyout program has seen roughly 120,000 head signed up to be liquidated; a number which might grow between now and the Sept. 1 close of the program that was aimed at reducing the sow herd by 150,000.

It also noted some Canadian producers have liquidated their sow herds but not signed up for the government program because they did not want to commit to staying out of the business for three years.



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